The estate of now-defunct crypto exchange FTX has filed a lawsuit against Binance and its former CEO Changpeng Zhao in a bid to recover $1.76 billion. FTX alleges these funds were fraudulently transferred to Binance, Zhao, and other Binance executives in July 2021 as part of a shares repurchase deal with FTX co-founder Sam Bankman-Fried.

According to the filing, the transaction saw Binance sell back the 20 percent stake it held in FTX’s international unit and 18.4 percent in its US-based entity, which Bankman-Fried paid for using a mix of FTX and Binance-branded cryptocurrencies. The FTX estate alleges the share repurchase deal was conducted unlawfully because — following massive fraud by Bankman-Fried and other executives — FTX and its sister company Alameda were already insolvent at the time, and unable to fund the transaction.

Bankman-Fried, who is serving a 25-year prison sentence, was convicted of fraud last year after using customer funds to make investments, political donations, and purchase property.

Separately, the lawsuit says that Zhao sent “a series of false, misleading, and fraudulent tweets that were maliciously calculated to destroy his rival FTX.” Zhao tweeted on November 6th, 2022 that Binance was planning to liquidate $529 million worth of FTX tokens. According to the FTX estate, this “triggered a predictable avalanche of withdrawals” that contributed to the collapse of the crypto exchange.

The run on FTX ended up exposing a financial house of cards at the company, leading to criminal charges against Bankman-Fried and others. The Securities and Exchange Commission said that the downfall of FTX was caused by Bankman-Fried’s “own misappropriation of customer funds,” and that the operation was a fraud “from the start.”

An unnamed Binance spokesperson told Bloomberg that the claims against the company “are meritless,” and that the company will “vigorously defend ourselves.”

This lawsuit is one of more than 20 that the FTX estate has recently filed to reclaim billions of dollars owed to creditors. This includes Alameda suing Waves blockchain founder Aleksandr Ivanov to recoup $90 million that was previously deposited to Vires, a Waves-based liquidity platform. Last month, the FTX estate also received court approval for its plan to repay $16 billion to customers who lost money when the company collapsed.